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Hotelier Magazine - Company Of The Year: Fortis Properties

We take a long-term view with less emphasis on short-term fixes and wins,” says Nora Duke, speaking about the company over which she presides. It’s a no-nonsense approach that has served Fortis Properties well, particularly through the last stretch of economic hardship that has sent many of its contemporaries tumbling — well enough, indeed, to score Company-of-the-Year honours in this year’s edition of Kostuch Media’s Pinnacle Awards.

Much of the credit for this distinction goes to Duke herself, the president and CEO who has served as a tireless champion, not only of her hotel-management firm, but of the industry overall. Colleagues tell stories of a hard-nosed, dedicated professional who brings compassionate acumen to all that she does. “Under Nora’s leadership, Fortis Properties has grown to be a major force in the Canadian hotel sector,” enthuses Glenn Squires, CEO of Pacrim Hospitality Services and chairman of the IHG Owners Association’s Board of Directors. It’s a sentiment echoed by most of her staff.

The captain steering this vessel is a unique soul — named one of Atlantic Canada’s Top 50 CEOs by Atlantic Business magazine for four consecutive years. She understands that success is ultimately the result of a marriage of scrupulous management, customer service excellence and a high-level of employee engagement. “I don’t know of many organizations where you’d see a CEO dancing to Men Without Hats’ “Safety Dance” laughs Tanya Finlay, corporate manager of Human Resources at Fortis, remembering a recent safety-campaign session in which Duke played a characteristically exuberant role.

The St. John’s, N.L. and Labrador-based company is a wholly owned subsidiary of Fortis Inc., the largest investor-owned distribution utility firm in Canada. It grew by $5 million between 2010 and 2011, bringing total sales in 2011 to $164.2 million. Today, Fortis boasts a portfolio of 23 hotels in eight provinces (excluding Quebec and P.E.I.) representing more than 4,430 rooms and 2.7-million sq. ft. of commercial and retail real estate. The company manages its own hotels — most of which are in secondary markets — and employs approximately 2,400 people. Eighteen of its hotels operate under national/international brands while 11 are Holiday Inns with the balance independently branded.

Fortis embraces a culture of disciplined growth. Prospective acquisitions are meticulously vetted for their fit with the existing portfolio and their potential to meet a certain level of return. Among the more recent examples of this strategy in action can be found in Fortis’ purchase, this past October, of its 23rd hotel, the Station Park All Suite Hotel in London, Ont. This solid performer added 126 guestrooms and 1,800 sq. ft. of meeting space to the company’s existing portfolio, enhancing its position in the southwestern Ontario market, where Fortis already owns and operates five hotels. (Company brass denies a preference for the region, saying they simply like to find the best opportunities.)

Over the years, this approach to acquisitions has served Fortis Properties well. In 2011, its hospitality division achieved RevPAR growth of 2.5 per cent, an impressive achievement compared to a much more restrained national RevPAR upturn over the same period of 1.1 per cent. With ADR increasing modestly in all three operating regions, the company’s RevPAR has almost recovered to pre-recession levels of $80.39, with this year’s RevPAR projected to reach $79.70. All told, the company has invested $231.2 million in acquisitions and $37 million in hotel expansions over the past eight years, for a current asset base of $1 billion.

Among a long list of notable achievements from the past year, Fortis Properties’ $25-million purchase of the Hilton Suites Winnipeg Airport in October 2011 stands out. As the company’s first Hilton product, the purchase added an additional 135 employees, 160 guestrooms and 8,500 sq. ft. of meeting space to its fortunes. While the company won’t provide specifics on the hotel’s performance, it does say the new acquisition is performing well as per expectations.

In 2011, Fortis Properties invested $30.7 million to sustain its capital expenditures. These outlays included $5 million to renovate its Lethbridge and Edmonton, Alta., hotels, rebranding them as Holiday Inns. It also spent a further $1.5 million to restore parts of N.L’s Greenwood Inn and Suites Corner Brook, which were damaged in a May 2011 kitchen fire.

On the foodservice side, 2012 highlights included a seven-person culinary expedition to the renowned James Beard House in New York to host a dinner in May entitled “Canadian Spring Celebration.” Last year, the team also proudly launched “Grill 55” — a casual fine-dining restaurant — at the Holiday Inn and Suites Windsor.

Financial achievements at Fortis come courtesy of a decentralized management style founded on the principles of autonomy, trust and accountability. “We’re always seeking opportunities to do better and strengthen our performance,” says Duke. During the past economic downturn, she asked Fortis managers to identify opportunities for cost control within their areas of responsibility, to defer discretionary and non-priority expenses, and to share internal expertise and resources. The company-wide belt tightening saw the organization focus on priority projects and preserve overall earnings. “We chose not to do major layoffs,” says Duke, “But we did seek everyone’s support keeping costs in line.”

Observers say much of Fortis Properties’ success is the fruit of Duke’s long-term vision. It’s her take on the company’s mission, they say, that has catapulted it to the spot it occupies. “Nora’s longevity with Fortis is a testament to the respect the industry and her company have for her,” says Jay Fishman, one of Duke’s colleagues and the president of Associated Hotels, LLC, a Chicago-based hotel-management company.

“What I’m most proud of at this company is our strong leadership team that’s truly engaged and aligned,” says Duke. Company lore includes an abundance of anecdotal evidence to support her claim, including the well-told tale of a Fortis staffer who was eating lunch at the Holiday Inn, in St. John’s N.L., one day last summer, when she noticed an unfamiliar face at the dishwashing station. His shirt sleeves rolled up, a company uniform pulled over his suit and tie, the guy was clearly pitching in to alleviate a short-staffed lunchtime rush. Squinting her gaze, she realized the interloper was in fact the hotel GM. “We have a pretty compelling culture of team support and mutual respect, and that really works for us,” sums up Duke.

Under Duke’s supervision, a prescription for robust fiscal management, customer-service excellence, and an ambitious program of employee development has been well defined. Individual managers are exceedingly responsive to the expectations the company has of them across the board. Executives stay in touch via annual management meetings where corporate goals are reiterated and feedback from leaders is encouraged.

Taking the temperature of employees is a hallmark of Fortis Properties’ formula for success, and individuals on both sides of the management divide believe it’s instrumental in advancing the company. Employee opinion surveys — polling both the operating and corporate-office divisions — measure satisfaction levels with respect to recognition, engagement, health-and-safety efforts, customer service and communication.

“There’s a focus on results and a high level of accountability here,” says Finlay. “But there’s also balance in terms of autonomy and having the guidance available when you need it.” Finlay considers Fortis Properties’ emphasis on culture a major contributor to the company’s success. “Employers will compare themselves in terms of compensation, but there has to be something more that stands out,” she says. “There’s a nice energy at Fortis Properties; a no-frills, down-home approach, and a real sense of fairness and integrity in everything we do. [When the GM pitched in at the restaurant], that wasn’t an unusual scene. I would suspect you’d see examples of that across the organization. People rise to the challenge around here. They go above and beyond.”

Born in Fox Harbour, Placentia Bay, N.L., a small outport community with a population of about 300, Duke herself goes above and beyond thanks to a foundation that taught her she could. To this day, she harkens back to her modest upbringing on the rock, where her childhood was truly “rich” and her “wonderfully grounded parents” had important lessons to impart. “They emphasized the importance of relationships, community and doing the right thing,” Duke says. “I now recognize the often simple but key leadership cues my parents passed along in those early days. It’s about staying true to our values — [true] to what makes us who we are.”

In addition to embracing an operational style that speaks to visibility and accessibility, an emphasis on employee development keeps Fortis Properties’ workers satisfied. At Fortis, coaching, mentoring, professional development, job-shadowing and secondment-placement opportunities are the focus. And, through a combination of formal and informal practices, identifying good talent is management’s priority. It makes sense, Finlay shrugs. “People really determine what our culture is.”

It should surprise no one, then, that Fortis Properties endorses a vigorous commitment to give back to the communities in which it operates. Each year, the organization donates close to $1 million to community partners engaged in a range of philanthropic activities, with an emphasis on those committed to reducing poverty, caring for youth and enhancing health care. In 2010, the company’s Delta Brunswick Hotel received the Hotel Association of Canada’s Humanitarian Award for its work with the Business Community Anti-Poverty Initiative and Habitat for Humanity, among other charitable initiatives. And, Fortis Properties’ Sheraton Hotel Newfoundland recently played host to the fourth annual Children’s Wish Foundation dinner and auction, raising $56,000. Duke herself chaired Bust-a-Move, St. John’s, a fitness fundraiser supporting breast health in Newfoundland and Labrador this past March. The effort raised $351,000.

“She’s always accessible and responsive, and a strong voice for the Canadian hotel market,” says Bill Stone, executive vice-president of CBRE Hotels. Having worked with Duke for more than a decade, he believes she’s highly dedicated not only to her own operation, but the growth of the industry as a whole. “Nora always makes time for people, whether they’re competitors, colleagues or other hotel owners, and she’s widely respected.”

In this way, Fortis Properties’ commitment to the industry distinguishes its script from many others. Duke sits on the Board of the Ottawa-based Hotel Association of Canada (HAC) and the InterContinental Hotel Group’s (IHG) Owners’ Association, and serves as chair of the association’s Canada Committee. Her contributions haven’t gone unnoticed. “As chair of the Canada committee, Nora has been instrumental in communicating to IHG on behalf of all franchisees in the region,” says IHG Owners’ Association president, Eva Ferguson. “Her knowledge and experience in the hotel industry is unparalleled and the association has benefited greatly from her involvement.”

Endorsing Duke and her company-building efforts, is a sentiment echoed by outsiders and insiders alike. “Given the impeccable reputation of Fortis, having Nora represent Canada and the industry in our association gives increased credibility to what our organization and IHG are trying to accomplish for our brands,” says Fishman, who sits on the IHG Owners Association Board.

Duke’s distinction as a female leader in a male-dominated industry is enviable. “For anyone looking to bridge the gender gap, Nora offers a powerful example,” says Terry Chaffey, Fortis Properties’ vice-president of Real Estate. “She may be in the minority as a female CEO leading a property company, but she herself wouldn’t get that. Simply put, Nora is an astute, fair, very hard-working person who’ll tell you her success has more to do with the 2,400 team members on her bus. Truth is, the bus driver herself has authored much of that success,” Chaffey offers.

Married with two daughters attending her alma mater — Memorial University, where she earned her B.Comm and MBA — Duke believes in doing what’s right every day, and especially during the difficult times the industry has experienced. “All in all,” Duke says humbly, “we managed this uncertainty reasonably well, and also grew the company during that same time frame. I’m pretty proud of that.”

What’s up next for Fortis Properties? A continued focus on health-and-safety awareness and accountability, to pick up from an initiative launched in 2011, when the decreases in both lost time and claims duration were felt, with year-over-year lost-time incident rates falling by 11.9 per cent and the average weeks per claim decreasing by 22.8 per cent. The fact that health-and-safety attracts a company-wide focus is essential to its success. In terms of its mission statement, Duke says the company will “stay the course with a strong focus on guest satisfaction, employee engagement and shareholder value. It also means we’ll continue to seek strong growth opportunities that fit and reinvest strategically in our existing hotels.”